USA Interactive Won't Boost Bid for 3 Net Firms

E-commerce: Value of deal has dropped by about $400million since it was announced Monday.

NEW YORK — USA Interactive Inc. on Wednesday said it has "no intention" of increasing its offer to buy the shares it does not own of three publicly traded subsidiaries, Expedia Inc., Hotels.com and Ticketmaster, even though the value of the deal had dropped by roughly $400 million in three days.

At the same time, the media giant acknowledged that it might have to discuss "other possible transaction structures" to get the deal done. It said it would delay a tender offer.

Since the deal was announced Monday, USA Interactive's stock price has declined 9%. On Wednesday shares closed at $26.03 on Nasdaq, up 93 cents. But each of its subsidiaries' stock prices has risen, diluting the value of the deal. As a result, each subsidiary would receive less than its current market value.

Originally, USA's offer was valued at roughly $4.5 billion. By the end of trading Wednesday, the deal was worth about $4.1 billion.

"Right now USA is offering a discount, not a premium," said Jake Fuller, an analyst at Thomas Weisel Partners. "The obvious implication is the market is telling USA you've got to offer more to get this deal done."

USA Interactive has majority stakes in the subsidiaries and controls more than 90% of the voting shares. Expedia is an online travel company, Hotels.com sells hotel reservations online and Ticketmaster sells tickets to entertainment events.

Expedia shareholders would receive $70.20 a share, Hotels.com shareholders $47.02 a share and Ticketmaster shareholders $21 a share. Shares of Expedia closed Wednesday at $73.19, up $1.16; Hotels.com closed at $49.29, up 70 cents; and Ticketmaster closed at $22, up 59 cents, all on Nasdaq.